`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549




                                    FORM 10-Q

(Mark one)
[X]   QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended December 31, 2003

                                       or
[ ]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(D)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from ______________ to _______________

                         Commission File Number 0-19824
                                                -------

                      Nutrition Management Services Company
                      -------------------------------------
             (Exact name of registrant as specified in its charter)

      Pennsylvania                                       23-2095332
  ------------------------------------------------------------------------------
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                      Identification No.)

   Box 725, Kimberton Road, Kimberton, PA                   19442
   -----------------------------------------------------------------------------
  (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code (610) 935-2050
                                                   --------------
                                       N/A
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if change since last report.

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days Yes /X/ No / /.

2,747,000  Shares of Registrant's  Class A Common Stock,  with no par value, and
100,000  shares of  Registrant's  Class B Common Stock,  with no par value,  are
outstanding as of February 14, 2004.







                                TABLE OF CONTENTS


Part I.    Financial Information                                        Page No.
           ---------------------                                        --------

           Consolidated Balance Sheets as of
           December 31, 2003 (unaudited) and June 30, 2003                    2

           Consolidated Statements of Operations for the Three and Six
           Months Ended December 31, 2003 and 2002
           (unaudited)                                                        3

           Consolidated Statements of Cash Flows for the
           Six Months Ended December 31, 2003
           and 2002 (unaudited)                                               4

           Notes to Consolidated Financial Statements                    6 - 10

           Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                    11 - 15

           Item 4 - Controls and Procedures                                  16

Part II.   Other Information                                                 17

           Signatures                                                        18

                                       1





                      NUTRITION MANAGEMENT SERVICES COMPANY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


                                                            December 31,     June 30,
                                                               2003            2003
                                                               ----            ----
                                                            (unaudited)
Current assets:
   Cash and cash equivalents                                $   763,165     $ 1,360,512
   Accounts receivable, net of allowance for doubtful
   accounts of $2,412,326  and $2,292,326, respectively       3,474,699       2,843,764
   Accrued income                                                85,791          51,147
   Deferred income taxes                                      1,209,454       1,209,454
   Inventory                                                    168,062         155,945
   Prepaid and other                                            423,648         365,558
   Income tax refund                                             63,348          63,348
                                                            -----------     -----------

Total current assets                                          6,188,167       6,049,728
                                                            -----------     -----------

Property and equipment, net                                   7,844,284       8,103,456
                                                            -----------     -----------


Other assets:
   Note Receivable                                              128,816         136,110
   Advances to employees                                        435,283         435,283
   Deferred income taxes                                        212,687         212,687
   Bond issue costs                                             191,491         195,430
   Deferred costs and other assets                               10,020          10,020
                                                            -----------     -----------

Total other assets                                              978,297         989,530
                                                            -----------     -----------

                                                            $15,010,748     $15,142,714
                                                            ===========     ===========

            See Notes to Unaudited Consolidated Financial Statements

                                        2





                      NUTRITION MANAGEMENT SERVICES COMPANY

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                  December 31,         June 30,
                                                                                      2003              2003
                                                                                      ----              ----
                                                                                  (unaudited)
Current liabilities:
     Current portion of long-term debt                                           $    165,380      $    196,813
     Current portion of note payable                                                  322,946           575,687
     Accounts payable                                                               3,063,578         2,883,496
     Accrued expenses                                                                 362,354           303,756
     Accrued payroll and related expenses                                             241,016           246,622
     Other                                                                            112,034           116,880
                                                                                 ------------      ------------

Total current liabilities                                                           4,267,308         4,323,254
                                                                                 ------------      ------------

Long-Term liabilities:
    Long-term debt, net of current portion                                          5,505,922         5,184,891

    Long Term Note Payable                                                              - 0 -           154,452
                                                                                 ------------      ------------

Total long-term liabilities                                                         5,505,922         5,339,343
                                                                                 ------------      ------------


Stockholders' equity:
    Undesignated preferred stock - no par, 2,000,000 shares authorized, none
            issued or outstanding                                                        --                --

     Common stock:
     Class A - no par, 10,000,000 shares authorized; 3,000,000 issued and
               2,747,000 outstanding                                                3,801,926         3,801,926
     Class B - no par, 100,000 shares authorized, issued and outstanding                   48                48
     Retained earnings                                                              1,935,107         2,177,706
                                                                                 ------------      ------------
                                                                                    5,737,081         5,979,680



     Less:  treasury stock (Class A common: 253,000 shares) - at cost                (499,563)         (499,563)
                                                                                 ------------      ------------

Total stockholders' equity                                                          5,237,518         5,480,117
                                                                                 ------------      ------------

                                                                                 $ 15,010,748      $ 15,142,714
                                                                                 ============      ============

            See Notes to Unaudited Consolidated Financial Statements

                                        3





                      NUTRITION MANAGEMENT SERVICES COMPANY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                   Three months ended                  Six months ended
                                                       December 31,                       December 31,
                                                  2003               2002             2003             2002
                                                  ----               ----             ----             ----
Food Service Revenue                         $  7,175,557      $  7,166,653      $ 13,882,411      $ 14,423,053

Cost of operations
     Payroll and related expenses               2,851,728         2,797,621         5,362,130         5,621,275
     Other costs of operations                  2,984,272         3,151,052         5,867,390         6,271,378
                                             ------------      ------------      ------------      ------------
          Cost of operations                    5,836,000         5,948,673        11,229,520        11,892,653
                                             ------------      ------------      ------------      ------------

Gross profit                                    1,339,557         1,217,980         2,652,891         2,530,400
                                             ------------      ------------      ------------      ------------

Expenses
     General and administrative expenses        1,190,626         1,236,910         2,367,466         2,260,433
     Depreciation and amortization                155,547           200,953           309,945           413,806
     Provision for doubtful accounts               60,000             7,262           120,000           192,262
                                             ------------      ------------      ------------      ------------
          Expenses                              1,406,173         1,445,125         2,797,411         2,866,501
                                             ------------      ------------      ------------      ------------

(Loss) from operations                            (66,616)         (227,145)         (144,520)         (336,101)
                                             ------------      ------------      ------------      ------------

Other (expense) income
     Other                                         (4,509)           (6,862)           (9,018)          (20,629)
     Interest income                                1,917             2,185             3,557             4,027
     Interest expense                             (47,441)          (50,395)          (92,624)         (104,459)
                                             ------------      ------------      ------------      ------------
          Other (expense) income - net            (50,033)          (55,072)          (98,085)         (121,061)
                                             ------------      ------------      ------------      ------------

(Loss) before income taxes                       (116,649)     $   (282,217)         (242,605)         (457,162)

Provision for income taxes                              0                 0                 0                 0
                                             ------------      ------------      ------------      ------------

Net Loss                                     $   (116,649)         (282,217)     $   (242,605)     $   (457,162)
                                             ============      ============      ============      ============

Basic and diluted loss
      - basic and diluted                    $      (.04)      $      (.10)      $       (.08)     $      (.16)
                                             ===========       ============      ============      ============

Weighted average number of shares              2,847,000         2,847,000          2,847,000        2,847,000
                                             ===========       ============      ============      ============

            See Notes to Unaudited Consolidated Financial Statements

                                        4




                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                                                                       Six Months Ended
                                                                                                         December 31,
                                                                                                   2003             2002
                                                                                                   ----             ----
Operating activities:
Net (Loss)                                                                                     $ (242,605)      $ (457,162)
Adjustments to reconcile net (loss) to net cash provided by/(used in)
operating activities:
     Depreciation and amortization                                                                309,945          413,806
     Provision for bad debts                                                                      120,000          192,262
     Amortization of bond costs                                                                     7,282            7,282

Changes in assets and liabilities:
     Accounts receivable                                                                         (743,640)       1,070,458
     Accrued Income                                                                               (34,644)         (50,883)
     Inventory and other                                                                          (12,118)          92,557
     Accounts payable                                                                             (72,657)        (137,210)
     Accrued expenses                                                                              68,115          (49,050)
     Accrued payroll and related expenses                                                          (5,607)          (1,603)
     Accrued professional                                                                          (9,516)         (28,088)
     Accrued incomes taxes                                                                            -0-           (7,941)
     Other                                                                                        (66,272)        (197,814)
                                                                                              -----------      -----------
Net cash (used in) / provided by operating activities                                            (681,717)         846,614
                                                                                              -----------      -----------
Investing activities:
     Repayment (Advances) to employees                                                                -0-           87,088
     Purchase of property and equipment                                                           (50,774)         (31,311)
                                                                                              -----------      -----------
                                                                                                  (50,774)          55,777
Financing activities                                                                                 --               --
     Repayments of long-term borrowing
     Repayments of long-term payable
     Repayments of term loan                                                                   (1,680,000)        (872,000)
     Proceeds from long term borrowing                                                           (154,453)         (84,247)
Net cash provided by / (used in) financing activities                                             (35,403)         (32,844)
                                                                                                2,005,000          585,000
                                                                                              -----------      -----------
 Net (decrease) / increase in cash                                                                135,144         (404,091)
                                                                                              -----------      -----------

Cash and cash equivalents - beginning of period                                                  (597,347)         498,300
                                                                                              ===========      ===========

Cash and cash equivalents - end of period                                                       1,360,512          593,310
                                                                                              -----------      -----------

Supplemental disclosure of cash flow information:                                             $   763,165      $ 1,091,610
                                                                                              ===========      ===========
Cash paid during the period for:
     Interest                                                                                 $    92,125      $   106,432
     Income taxes                                                                             $      -0-       $   (17,764)

            See Notes to Unaudited Consolidated Financial Statements

                                        5





                      NUTRITION MANAGEMENT SERVICES COMPANY

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2003

1.      BASIS OF PRESENTATION

        The  accompanying   unaudited  consolidated  financial  statements  were
        prepared in accordance with generally accepted accounting principles for
        interim  financial  information for quarterly  reports on Form 10-Q and,
        therefore,  do not include all of the information and footnotes required
        by generally  accepted  accounting  principles  for  complete  financial
        statements.  However, all adjustments that, in the opinion of management
        are necessary for fair  presentation of the financial  statements,  have
        been  included.  The  results  of  operations  for the  interim  periods
        presented  are not  necessarily  indicative  of the results  that may be
        expected for the entire fiscal year ending June 30, 2004.  The financial
        information  presented  should be read in conjunction with the Company's
        financial statements that were filed under Form 10-K.

2.      NEW ACCOUNTING PRONOUNCEMENTS

        In May 2003, the FASB issued Statement No. 150,  "Accounting for Certain
        Financial  Instruments  with  Characteristics  of both  Liabilities  and
        Equity"  ("SFAS 150").  SFAS 150 clarifies  the  accounting  for certain
        financial  instruments  that,  under  previous  guidance,  issuers could
        account  for as equity.  SFAS 150  requires  that those  instruments  be
        classified as liabilities in statements of financial position.  SFAS 150
        is  effective  for all  financial  instruments  entered into or modified
        after May 31, 2003,  and  otherwise is effective at the beginning of the
        first  interim  period  beginning  after  June 15,  2003.  To date,  the
        adoption of this  interpretation did not have an effect on the Company's
        financial position or results of operations.

        In  April  2003,  the FASB  issued  Statement  No.  149,  "Amendment  of
        Statement 133 on Derivative  Instruments and Hedging  Activities" ("SFAS
        149").  SFAS  149  amends  SFAS  No.  133,  "Accounting  for  Derivative
        Instruments and Hedging Activities" to clarify the financial  accounting
        and reporting for derivative  instruments and hedging  activities.  SFAS
        149 is intended to improve financial  reporting by requiring  comparable
        accounting  methods for similar  contracts.  SFAS 149 is  effective  for
        contracts  entered into or modified  subsequent  to June 30,  2003.  The
        requirements of SFAS 149 do not affect the Company's current  accounting
        for derivative instruments or hedging activities;  therefore,  it has no
        effect on the Company's financial condition or results of operations.


                                        6





                      NUTRITION MANAGEMENT SERVICES COMPANY

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                December 31, 2003

2.      NEW ACCOUNTING PRONOUNCEMENTS - CONTINUED

        In January  2003 the FASB  issued  FIN 46,  "Consolidation  of  Variable
        Interest  Entities"  ("FIN  46").  This   interpretation  of  Accounting
        Research Bulletin No. 51, "Consolidated Financial Statements," addresses
        consolidation  by  business  enterprises  of certain  variable  interest
        entities where there is a controlling  financial  interest in a variable
        interest entity or where the variable  interest does not have sufficient
        equity at risk to finance its activities without additional subordinated
        financial support from other parities. The interpretation applies in the
        first  year or interim  period  beginning  after  January  31,  2003 and
        applies  in the first year or interim  period  beginning  after June 15,
        2003 to  variable  interest  entities  in  which an  enterprise  holds a
        variable  interest that it acquired before February 1, 2003. The Company
        will apply the consolidation  requirement of FIN 46 in future periods if
        the Company should own any interest in any variable interest entity.

3.      EARNINGS PER COMMON SHARE

        Earnings  per common  share  amounts  are based on the  weighted-average
        number of shares of common  stock  outstanding  during the three and six
        month  periods  ending  December  31, 2003 and 2002.  Stock  options and
        warrants  did not impact  earnings  per share  each  period as they were
        anti-dilutive.

4.      LITIGATION

        On February  7, 2001,  NMSC filed a suit  against a major  client in the
        Court of Common Pleas in Chester County,  PA. This suit has subsequently
        been  removed  to the  United  States  District  Court  for the  Eastern
        District of Pennsylvania.  In the lawsuit, NMSC has made various claims,
        including   among  others  a  claim  that  the  client   failed  to  pay
        approximately  $2.1 million in invoiced amounts, a claim that the client
        failed to pay  approximately  $1 million in other amounts owing, a claim
        for reimbursement for start up costs in an amount in excess of $400,000,
        a claim for over $2 million in lost profits (or, alternatively,  a claim
        for  reimbursement  for over $300,000 in credits  issued in exchange for
        the promise to extend the arrangement),  a claim in the nature of treble
        damages  and  counsel  fees,  and other  claims.  The client has filed a
        counterclaim  which the  Company is  contesting  as part of the  overall
        proceedings.  Although it is not possible to predict with  certainty the
        outcome of these  unresolved legal actions or the range of possible loss
        or recovery,  the Company  believes these  unresolved legal actions will
        not have a material adverse effect on its financial  position or results
        of operations.

                                        7




                      NUTRITION MANAGEMENT SERVICES COMPANY

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                December 31, 2003

4.      LITIGATION - CONTINUED

        In addition to the litigation described above, the Company is exposed to
        asserted  and  unasserted  claims.  In the  opinion of  management,  the
        resolution of these matters will not have a material  adverse  effect on
        the Company's financial position, results of operations or cash flows.

5.      BUSINESS SEGMENTS

        The  Company  follows  the  disclosure   provisions  of  SFAS  No.  131,
        Disclosures  about  Segments of an Enterprise  and Related  Information.
        This management approach focuses on internal financial  information that
        is  used by  management  to  assess  performance  and to make  operating
        decisions.  SFAS  No.  131 also  requires  disclosures  about  products,
        services,  geographic  areas, and major customers.  The adoption of SFAS
        No.  131  had no  effect  on the  Company's  results  of  operations  or
        financial position.

        The Company's  reportable  segments are (1) food service  management and
        (2)  training  and  conference   center.  The  Company  reports  segment
        performance  on an after tax basis.  Deferred taxes are not allocated to
        segments.  The management  accounting policies and processes utilized in
        compiling  segment  financial  information  are highly  subjective  and,
        unlike financial  accounting,  are not based on  authoritative  guidance
        similar to accounting principals generally accepted in the United States
        of America.  As a result,  reported  segment results are not necessarily
        comparable with similar information reported by other similar companies.

                                                      Food Service         Training and
                                                      Management           Conference Center        Total
                                                      ----------           -----------------        -----

         For the quarter ended Dec. 31, 2003:
           Food service revenue                       $6,875,555            $  300,002          $ 7,175,557
           Depreciation and amortization                  31,164               124,383              155,547
           Income (loss) from operations                 276,526              (343,142)             (66,616)
           Interest income                                 1,917                 0                    1,917
           Interest expense                              (29,513)              (17,928)             (47,441)
           Income (loss) before taxes                    248,921              (365,570)            (116,649)
           Net income (loss)                             248,921              (365,570)            (116,649)
           Total assets                                6,850,101             8,160,648           15,010,748


                                        8



                      NUTRITION MANAGEMENT SERVICES COMPANY

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                December 31, 2003

5.     BUSINESS SEGMENTS - CONTINUED

                                                      Food Service         Training and
                                                      Management           Conference Center        Total
                                                      ----------           -----------------        -----
                                                                                                                                           Total
         For the quarter ended Dec. 31, 2002:
           Food service revenue                       $6,859,980            $  306,673          $7,166,653
           Depreciation and amortization                  73,005               127,948             200,953
           Income (loss) from operations                 175,938              (403,083)           (227,145)
           Interest income                                 2,185                 0                   2,185
           Interest expense                              (29,115)              (21,280)            (50,395)
           Income (loss) before taxes                    146,654              (428,871)           (282,217)
           Net income (loss)                             146,654              (428,871)           (282,217)
           Total assets                                7,647,018             8,602,320          16,249,338

                                                      Food Service         Training and
                                                      Management           Conference Center        Total
                                                      ----------           -----------------        -----
         For the six months ended Dec. 31, 2003:
           Food service revenue                       $13,403,435          $  478,976           $13,882,411
           Depreciation and amortization                   61,443             248,502               309,945
           Income (loss) from operations                  565,045            (709,565)             (144,520)
           Interest income                                  3,557               0                     3,557
           Interest expense                               (57,758)            (34,866)              (92,624)
           Income (loss) before taxes                     510,836            (753,441)             (242,605)
           Net income (loss)                              510,836            (753,441)             (242,605)
           Total assets                                 6,850,101           8,160,647            15,010,748

                                                      Food Service         Training and
                                                      Management           Conference Center        Total
                                                      ----------           -----------------        -----

         For the six months ended Dec. 31, 2002:
           Food service revenue                      $13,955,952           $  467,101           $14,423,053
           Depreciation and amortization                 149,236              264,570               413,806
           Income (loss) from operations                 420,283             (756,384)             (336,101)
           Interest income                                 4,027                0                     4,027
           Interest expense                              (60,622)             (43,837)             (104,459)
           Income (loss) before taxes                    352,076             (809,238)             (457,162)
           Net income (loss)                             352,076             (809,238)             (457,162)
           Total assets                                7,647,018            8,602,320            16,249,338

                                        9




                      NUTRITION MANAGEMENT SERVICES COMPANY

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                December 31, 2003

6.      REVOLVING CREDIT FACILITY

        In February 2001, the Company  executed a loan agreement with a bank for
        a  revolving  credit and two  irrevocable  letters  of credit  issued in
        conjunction with the issuance of the Industrial Revenue Bonds,  totaling
        $4,000,000 and  $3,065,000,  respectively.  In March 2003, the revolving
        credit was  extended  from March 31, 2004 to  December  31, 2004 and the
        letters of credit are available for four years with annual renewals.  At
        June 30, 2003, the Company had available approximately  $1,494,108 under
        the revolving  credit.  Advances under the revolving credit are used for
        working capital purposes.

        These credit agreements contain covenants that include the submission of
        specified  financial   information  and  the  maintenance  of  insurance
        coverage  for the  pledged  assets  during  the term of the  loans.  The
        covenants  also  include the  maintenance  of a certain  fixed  coverage
        ratio, total liabilities to consolidated tangible net worth, and minimum
        working  capital.   Compensating  balances  required  for  these  credit
        agreements totaled $655,102 as of June 30, 2003.

        At June 30, 2003 the Company was not in compliance with these covenants.
        On  October  20,  2003,  the  Company  entered  into an  amended  credit
        agreement whereby the non-compliance at June 30, 2003 was waived and new
        financial covenants were negotiated through June 30, 2004, which reflect
        the Company's current operating projections. As a condition of obtaining
        said waivers and amendments,  the Loan Facility availability was reduced
        from  $4,000,000  to  $3,500,000  and  $500,000  was  placed  in a  cash
        collateral  account and  pledged as  additional  collateral  against the
        revolver  note.

        The maturity date of the revolving  credit faciltiy has been extended to
        March 31, 2005.


                                       10




           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

            The following  discussion and analysis should be read in conjunction
with the financial statements and notes thereto.

FORWARD LOOKING STATEMENTS

            This  Form  10-Q  contains  forward-looking  statements  within  the
meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E
of the  Securities  Exchange  Act of 1934,  as amended,  that are intended to be
covered by the safe harbors  created  thereby.  Investors are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the  adequacy  of the  Company's  cash  from  operations,  existing
balances and  available  credit line.  Although  the Company  believes  that the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the  forward-looking  statements included in this Form 10-Q
will prove to be accurate.  Factors  that could cause  actual  results to differ
from the results discussed in the forward-looking  statements  include,  but are
not limited to, the outcome of the Company's litigation discussed under Item 4 -
Litigation.   In   light   of   significant   uncertainties   inherent   in  the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.

CRITICAL ACCOUNTING POLICIES

            The discussion  and analysis of our financial  condition and results
of operations are based upon the Company's  consolidated  financial  statements,
which have been  prepared in accordance  with  accounting  principles  generally
accepted in the United States of America.  The  preparation  of these  financial
statements  requires the Company to make estimates and judgments that affect the
reported amount of assets and  liabilities,  revenues and expenses,  and related
disclosure of  contingent  assets and  liabilities  at the date of the Company's
financial  statements.  Actual  results  may differ from these  estimates  under
different assumptions or conditions.

            Critical   accounting   policies  are  defined  as  those  that  are
reflective of significant judgments and uncertainties, and potentially result in
materially  different  results under different  assumptions and conditions.  The
Company believes that its critical  accounting  policies include those described
below.

REVENUE RECOGNITION

            Revenue is generated primarily from fees for food service management
at  continuing  care  and  health  care  facilities  and  the  Collegeville  Inn
restaurant.   Revenue  is  recognized  when  services  are  performed.   Ongoing
assessments of the credit worthiness of customers provide the Company reasonable
assurance of collectibility upon performance of services.


                                       11




           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (continued)

ACCOUNTS RECEIVABLE

            The Company performs ongoing credit evaluations of its customers and
adjusts credit limits based on payment history and the customer's current credit
worthiness,  as determined by a review of their current credit information.  The
Company  continuously  monitors  collections and payments from its customers and
maintains a provision for estimated credit losses based on historical experience
and any specific  customer  collection  issues that have been identified.  While
such credit losses have historically been within the Company's  expectations and
the provisions  established,  the Company cannot guarantee that it will continue
to experience the same credit loss rates that it has in the past.

IMPAIRMENT OF LONG-LIVED ASSETS EXCLUDING GOODWILL

            The Company  evaluates  the  carrying  value of  long-lived  assets,
including   intangible   assets  subject  to   amortization,   when  events  and
circumstances  warrant such a review. The carrying value of long-lived assets is
considered  impaired  when the  anticipated  undiscounted  cash  flows from such
assets are less than their carrying  value.  In that event, a loss is recognized
equal to the amount by which the  carrying  value  exceeds the fair value of the
long-lived assets. The Company  periodically  reviews the appropriateness of the
estimated useful lives of its long-lived assets.

INCOME TAX ACCOUNTING

            The Company  determines  its  provision  for income  taxes using the
asset  and  liability  method.  Under  this  method,  deferred  tax  assets  and
liabilities  are recognized for the future tax effects of temporary  differences
of existing assets and liabilities  and their  respective tax bases.  Future tax
benefits of tax loss and credit  carryforwards  also are  recognized as deferred
tax assets.  Deferred  tax assets are reduced by a  valuation  allowance  to the
extent  the  Company  concludes  there  is  uncertainty  as  to  their  ultimate
realization.  Deferred tax assets and liabilities are measured using enacted tax
rates in effect for the year in which those  temporary  differences are expected
to be  recovered  or settled.  The effect on  deferred  taxes of a change in tax
rates is recognized in income in the period that the change is enacted.

RESULTS OF OPERATIONS

            Revenues for the quarter ended December 31, 2003 were $7,175,557, an
increase  of  $8,904  or  .1%  compared  to  revenues  of  $7,166,653   for  the
corresponding  quarter  last  year.  Revenues  for the six  month  period  ended
December 31, 2003 were  $13,882,411,  a decrease of $540,642 or 3.9% compared to
the corresponding period in 2002. This change is primarily due to the net impact
of revenues from lost contracts versus revenues from new contracts.


                                       12




           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (continued)

            Costs  of  operations  for  the  current  quarter  were  $5,836,000,
compared  to  $5,948,673  for similar  expenses in the same period last year,  a
decrease of $112,673 or 1.9%.  For the six month period ended December 31, 2003,
cost of operations were $11,229,520, compared to $11,892,653 for the same period
last year, a decrease of $663,133 or 5.9% compared to the  corresponding  period
in 2002.  This decrease in cost of services is due to lower revenues  during the
six month  period  partially  offset by  inflationary  price,  wage and  expense
increases.

            Gross Profit for the quarter was $1,339,557, compared to $1,217,980,
an increase of $121,577 or 9.0%.  For the six month  period  ended  December 31,
2003, gross profit was $2,652,891  versus  $2,530,400 an increase of $122,491 or
4.6%. These increases are due to the cancellation of non performing contracts.

            General and administrative  expenses for the quarter were $1,190,626
or 16.6% of  revenue,  compared to  $1,236,910  or 17.3% of revenue for the same
quarter  last year,  a  decrease  of  $46,284.  For the six month  period  ended
December 31, 2003 general and administrative  expenses were $2,367,466  compared
to $2,260,433 for the  corresponding  period last year, an increase of $107,033.
The  increase  for the six month  period  versus the prior year is due to higher
fixed costs within the general and administrative expenses in the first quarter.

            Provision for doubtful accounts for the quarter was $60,000 compared
to $7,262 for the  corresponding  quarter  last year.  For the six month  period
ended December 31, 2003 provision for doubtful accounts was $120,000 compared to
$192,262 for the same period last year. The increase in the current quarter is a
result of a cash recovery of $141,738 of accounts receivable previously reserved
as uncollectible, being utilized to increase the allowance for doubtful accounts
in the 2002 quarter.  For the six month period lower sales volume contributed to
the decrease.

            Interest expense for the quarter totaled $47,441 compared to $50,395
for the same period last year. For the six month period ended December 31, 2003,
interest  expense was $92,624  versus  $104,459 in the  corresponding  period in
2002.  The  decrease  in  interest  expense  is a  result  of the  repayment  of
borrowings as well as a reduction in interest rates.

            For the  reasons  stated  above net loss after taxes for the quarter
ended  December  31,  2003  was  ($116,649)   compared  to  ($282,217)  for  the
corresponding  quarter last year. Net loss per share for the current quarter was
$0.04 compared to net loss per share of $0.10 for the corresponding quarter last
year.

            Net loss for the six month period was ($242,605)  versus  ($457,162)
for the corresponding  period last year. Net loss per share was ($0.08) compared
to net loss per share of ($0.16) for the same period last year.


                                       13




           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (continued)

LIQUIDITY AND CAPITAL RESOURCES

            At December 31, 2003, the Company had working capital of $1,920,857.

            OPERATING ACTIVITIES.  Cash consumed in operations for the six month
period  ended  December  31,  2003 was  $681,717  compared  to cash  provided by
operations of $846,614 for the six months ended  December 31, 2002.  The current
period's activity is primarily due to an increase in accounts receivable.

            INVESTING ACTIVITIES.  Investing activities consumed $50,774 in cash
in the current  period  compared to $55,777 in cash  provided in the same period
last year.

            FINANCING  ACTIVITIES.  Current period financing activities provided
$135,144 in cash compared to $404,091 consumed in the same period last year. The
change is attributable to $1,869,856 of debt repayments  offset by $2,005,000 of
debt proceeds.

            CAPITAL  RESOURCES.  The Company has certain credit  facilities with
its bank including a revolving  credit of  $3,500,000.  At December 31, 2003 the
Company had $534,078 available under its revolving credit facility.  The Company
issued two series of Industrial  Bonds totaling  $3,560,548 in December of 1996.
The outstanding  balance on the bonds was $2,675,000 as of December 31, 2003. On
October  20,  2003 the  Company  entered  into an  amended  agreement.  The Loan
Facility  contains  certain  covenants  that  include   maintenance  of  certain
financial  ratios,  maintenance of minimum levels of working  capital as well as
affirmative  and  negative  covenants.  The  Company  is  current  with  all its
obligations to its bank and on its bonds and has met all financial  covenants in
its loan documents.


                                                                 Payment Due By Period
                                            ---------------------------------------------------------------------------------------
                                                             Less
          Contractual                                        than 1         1 - 3              4 - 5                After 5
          Obligations                       Total             year          years              years                 years
          --------------------------------------------------------------------------------------------------------------------------
          Long-Term Debt*                $5,671,302        $165,380      $3,260,922           $335,000            $1,910,000
          Operating Leases                   46,449          18,580          27,869                  0                     0
          Total Contractual Cash
          Obligations                    $5,717,751        $183,960      $3,288,791           $335,000            $1,910,000
          --------------------------------------------------------------------------------------------------------------------------

  *         Long-Term  Debt  includes a  $2,965,922  outstanding  balance on the
            revolving line of credit,  leaving $534,078 available for borrowings
            under the $3,500,000 revolving line of credit.

                                       14





           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (continued)

                                                                           Amount of Commitment Expiration
                                                                                  Per Period
                                                           ----------------------------------------------------------------
          Other Commercial              Total Amounts      Less than       1 - 3                4 - 5            Over 5
             Commitments                  Committed          1 year        years                years             years
          -----------------------------------------------------------------------------------------------------------------
          Lines of Credit                 3,500,000           0          3,500,000                0                 0

          Standby Letter of
          Credit                          3,065,000           0          3,065,000                0                 0

          Total Commercial
          Commitments                     6,565,000           0          6,565,000                0                 0

            A substantial  portion of the Company's  revenues are dependent upon
the payment of its fees by customer  healthcare  facilities,  that, in turn, are
dependent  upon  third-party  payers  such as state  governments,  Medicare  and
Medicaid. Delays in payment by third-party payers,  particularly state and local
governments, may lead to delays in collection of accounts receivable.

            Based upon its present  plans,  management  believes that  operating
cash flow,  available  cash and available  credit  resources will be adequate to
make repayments of indebtedness  described  herein,  to meet the working capital
cash needs of the  Company and to meet  anticipated  capital  expenditure  needs
during the 12 months ending December 2004. In addition,  the Company anticipates
the sale of certain land adjacent to its Collegeville  facility that it believes
will net cash proceeds of not less than $2,000,000 during the fiscal year ending
June 30, 2004.

            In an effort to extend our current bank debt,  we may seek to access
the public equity market  whenever  conditions are favorable,  even if we do not
have an  immediate  need for  additional  capital at that time.  Any  additional
funding may result in  significant  dilution  and could  involve the issuance of
securities with rights, which are senior to those of existing  stockholders.  We
may  also  need  additional  funding  earlier  than  anticipated,  and our  cash
requirements,  in  general,  may vary  materially  from those now  planned,  for
reasons  including,  but not limited to,  competitive  advances  and higher than
anticipated revenues from operations.

                                       15




           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (continued)

ITEM 4.

CONTROLS AND PROCEDURES

            Based on their evaluation, as of a date within 90 days of the filing
of this Form 10-Q, the Company's  Chief  Executive  Officer and Chief  Financial
Officer have  concluded the Company's  disclosure  controls and  procedures  (as
defined in Rules  13a-14 and 15d-14 under the  Securities  Exchange Act of 1934)
are effective. There have been no significant changes in internal controls or in
other factors that could  significantly  affect these controls subsequent to the
date of their  evaluation,  including  any  corrective  actions  with  regard to
significant deficiencies and material weaknesses.


                                       16




                           PART II - OTHER INFORMATION


Item 1.    Legal Proceedings                                             None

Item 2.    Changes in Securities                                         None

Item 3.    Defaults Upon Senior Securities                               None

Item 4.    Submission of Matters to a Vote of Security Holders           None

Item 5.    Other Information                                             None

Item 6.    Exhibits and Reports on Form 8-K

           (a)  Exhibits
                31.1    Certification  of Chief  Executive  Officer  pursuant to
                        Rule 13a-14(a)  under the Securities and Exchange Act of
                        1934,  as  adopted   pursuant  to  Section  302  of  the
                        Sarbanes-Oxley Act of 2002.
                31.2    Certification of Principal Financial Officer pursuant to
                        Rule 13a-14(a)  under the Securities and Exchange Act of
                        1934,  as  adopted   pursuant  to  Section  302  of  the
                        Sarbanes-Oxley Act of 2002.
                32.1    Certification of Chief Executive  Officer pursuant to 18
                        U.S. C. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002.
                32.2    Certification of Principal Financial Officer pursuant to
                        18 U.S. C. Section 1350, as adopted  pursuant to Section
                        906 of the Sarbanes- Oxley Act of 2002.


                                       17





                                   SIGNATURES


            Pursuant to the requirements of the Securities Exchange Act of 1934,
the  Company  has duly  caused  this  report to be  signed on its  behalf by the
undersigned thereunto duly authorized.



                                        Nutrition Management Services Company


                                       /s/ Joseph V. Roberts
                                       -------------------------------
                                       Joseph V. Roberts
                                       Chairman and Chief Executive Officer


                                       /s/ Linda J. Haines
                                       --------------------------------
                                       Linda J. Haines
                                       (Principal Financial Officer)


Date:  February 14, 2004

                                       18`